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Understanding the argument -
Studies show that individuals with a high propensity for taking risks tend to have fewer ethical principles to which they consciously adhere in their business interactions than do most people. - Fact. High Risk taking people have fewer ethical principles as compared to low-risk-taking people.

On the other hand, individuals with a strong desire to be accepted socially tend to have more such principles than do most people. - Fact. Now, the author is comparing another set of people - people with a strong desire for acceptance tend to have more ethical principles than people with a weaker desire for acceptance.

And, in general, the more ethical principles to which someone consciously adheres, the more ethical is that person’s behavior. -Fact.

Therefore, business schools can promote more ethical behavior among future businesspeople by promoting among their students the desire to be accepted socially and discouraging the propensity for taking risks. - Conclusion. The author assumes some kind of causal connection here by virtue of which he/she concludes that discouraging the propensity of taking risks will eventually lead to more ethical principles (as if both are causally connected against just a random correlation).

Option Elimination - a flaw

(A) infers from the fact that something is usually true that it is always true - No. He/she doesn't say that because this happens, the business schools SHOULD do this. He/she says that the B Schools CAN promote more ethical behavior.
(B) takes for granted that promoting ethical behavior is more important than any other goal - other goals are out of scope.
(C) concludes merely from the fact that two things are correlated that one causes the other - Ok
(D) takes for granted that certain actions are morally wrong simply because most people believe that they are morally wrong - people's belief is out of scope.
(E) draws a conclusion that simply restates a claim presented in support of that conclusion - No.
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